Pennsylvania Corporate Net Income Tax: 7.49% in 2026 and the Schedule to 4.99%
Pennsylvania Corporate Net Income Tax: 7.49% in 2026 and the Schedule to 4.99%
The Pennsylvania corporate tax rate for 2026 is 7.49%. That figure is the rate for the Corporate Net Income Tax (CNIT), the state's corporate income tax on the taxable net income of corporations and of LLCs taxed as corporations. Under Act 53 of 2022, the rate falls by half a point each year until it reaches 4.99% for 2031 and after. If you are comparing the pa corporate tax rate with another state, or deciding whether to form a corporation or an LLC taxed as one, this guide covers the current rate, the schedule, who pays, the loss deduction limit, recent changes, and the other Pennsylvania taxes that people often confuse with the income tax.
This is informational content, not legal or tax advice. Your entity choice and tax position depend on your own facts. Before you file, make a tax election, or set up estimated payments, talk to a qualified CPA or tax attorney.
The 2026 rate: 7.49% on taxable net income
For tax years beginning in 2026, the Pennsylvania Corporate Net Income Tax rate is 7.49%. This is the pennsylvania corporate income tax that applies to a corporation's taxable income, not to its gross sales, and it is the figure most people mean when they search for the pennsylvania corporate tax rate 2026.
The rate applies to the tax year that begins in 2026. For a calendar-year company, that means January 1, 2026 through December 31, 2026. A company with a fiscal year is measured by the rate in effect when its tax year begins, so a fiscal year that starts in 2026 uses 7.49% even if part of it falls in 2027.
Here is an illustration, not a calculation for your return. A corporation with $200,000 of taxable income in a 2026 tax year, with no loss carryforward and before any apportionment to other states, would owe about $14,980 at 7.49% ($200,000 times 0.0749). If the business operates in more than one state, only the share of income attributable to Pennsylvania is taxed here, and the method for that share is a question for your CPA.
Who pays the Corporate Net Income Tax
The CNIT applies to:
- C corporations (business and for-profit corporations)
- LLCs that are taxed as corporations for federal purposes
A standard LLC is treated the same way it is classified for federal tax purposes. An LLC taxed as a partnership or as a disregarded entity does not pay the CNIT. Its income passes through to the owners, who pay the Pennsylvania Personal Income Tax at the flat 3.07% rate. The same 3.07% rate applies to income passed through from partnerships and S corporations. Pennsylvania has no LLC franchise tax and no separate LLC annual tax. Whether any entity-level tax applies to your particular structure is a question to confirm with a CPA.
One exception is the restricted professional company (PLLC). A PLLC must file a Certificate of Annual Registration by April 15, with a fee of $700 per eligible member for the 2025 reporting year. Confirm the fee for the current reporting year with the Department of State before you file.
The Pennsylvania corporate net income tax rate schedule through 2031
The rate has been on a fixed path since Act 53 of 2022 set it. Each year drops by 0.5 point until the rate reaches 4.99%. The schedule below shows the rate for each tax year.
| Tax year (beginning in) | CNIT rate |
|---|---|
| 2022 | 9.99% |
| 2023 | 8.99% |
| 2024 | 8.49% |
| 2025 | 7.99% |
| 2026 | 7.49% |
| 2027 | 6.99% |
| 2028 | 6.49% |
| 2029 | 5.99% |
| 2030 | 5.49% |
| 2031 and after | 4.99% |
Confirm the rate for your tax year with the Pennsylvania Department of Revenue at pa.gov/agencies/revenue before you calculate an estimate. Rates can change if the law changes, and the table is only as current as its source.
The net operating loss cap: 50% for 2026
A corporation with a loss from an earlier year can use that loss to reduce current taxable income, but only up to a cap. The cap is a percentage of taxable income, not a dollar amount.
Act 56 of 2024 raised the cap for losses from post-2024 tax years, from 40% toward 80%. The increase is phased in. For tax year 2026, the cap for these losses is 50%. Losses from pre-2025 tax years stay at the 40% cap. Confirm the cap for each year with the Department of Revenue, since the step-up continues in later years and the year you are filing for controls which cap applies.
Here is an example with a post-2024 loss at the 2026 cap. A corporation has $100,000 of taxable income before the loss deduction and $100,000 of prior losses. With a 50% cap, it can deduct $50,000, leaving $50,000 of taxable income. At 7.49%, the tax is $3,745 ($50,000 times 0.0749). Without the cap, the full loss would have reduced taxable income to zero. The cap is what keeps some tax due in the year the loss is used.
Act 45 of 2025: no longer following federal expensing
Act 45 of 2025 decouples Pennsylvania from two federal rules. Pennsylvania no longer follows the federal treatment for research and experimental expenditures, and it no longer follows the federal expensing rule for production property. In practice, a corporation may claim a federal deduction in a year that Pennsylvania does not allow in the same way, which means the Pennsylvania taxable income can differ from the federal figure.
If your business spends on research or buys production property, keep a separate Pennsylvania depreciation and amortization schedule. Do not carry the federal amounts straight onto the Pennsylvania return. Ask your CPA how Act 45 applies to your specific years and assets, and confirm the details with the Department of Revenue.
Other Pennsylvania business taxes that are not the income tax
Several taxes come up in the same searches as the corporate rate. Here is how they differ.
PA capital stock tax: no longer applies
The Pennsylvania capital stock and franchise tax is gone. It no longer applies to tax years beginning in 2016 or later. Articles and forum posts that describe a pa capital stock tax as a current cost are out of date. Your current Pennsylvania corporate tax is the CNIT described above, and the LLC has no franchise tax.
PA gross receipts tax: a separate tax
The pa gross receipts tax is a different tax from the CNIT. It is aimed at specific types of businesses, most notably certain public utilities, and it is not a general tax on a corporation's net income. Whether it applies to your business is a question for the Department of Revenue. Confirm before you assume it does or does not apply.
Annual reports with the Department of State
The annual report is a filing with the Department of State, not a tax. The fee is $7 for for-profit entities, and nonprofit corporations pay $0. Corporations file January 1 through June 30 each year. LLCs file January 1 through September 30 each year, a requirement that began January 1, 2025. You can file online at file.dos.pa.gov.
Registering for taxes and what you do not need
Pennsylvania registers business tax accounts through myPATH. The old PA-100 form was retired in 2022, so any guide that tells you to file one is out of date. Register for the taxes that apply to you at the Department of Revenue registration page. The state sales tax rate is 6%, and you need a sales tax account only if your business sells taxable goods or services.
Pennsylvania does not require a general state business license, and it does not require county business licenses. Some activities do need a state license or permit, depending on the trade and the location, so check the requirements for your business activity separately. Pennsylvania also uses a registered office rather than a registered agent. Every filing entity must list a Pennsylvania registered office with a street and number, and a post office box alone is not accepted. A business with no Pennsylvania address may use a Commercial Registered Office Provider (CROP) under a contract, and listing a CROP without one can carry penalties.
What to do now
- Confirm your federal tax classification. Only an entity taxed as a corporation pays the CNIT. An LLC taxed as a partnership or disregarded entity passes income to its owners at 3.07%.
- Estimate your 2026 tax at 7.49% if you are a corporation or an LLC taxed as one, and confirm the rate with the Department of Revenue for your tax year.
- Check for loss carryforwards and their cap. Separate pre-2025 losses (40% cap) from post-2024 losses (50% cap for 2026).
- Review Act 45 of 2025 items for research spending and production property, and keep a separate Pennsylvania schedule.
- Register on myPATH for the tax accounts that apply to you, and calendar your Department of State annual report.
- Confirm every figure with a CPA before you file or make estimated payments.
Official resources
- Pennsylvania Department of Revenue: pa.gov/agencies/revenue
- Register for taxes: pa.gov/services/revenue/register-my-business-for-taxes
- Department of State, Bureau of Corporations and Charitable Organizations: pa.gov/agencies/dos/programs/business
- Business Filing Services (annual reports and formation): file.dos.pa.gov
- Pennsylvania Small Business Development Centers: pasbdc.org
The rates, caps, and fees above reflect the sources listed here as of October 2026. Because this area of Pennsylvania law changes, confirm the current figure on the agency page before you rely on it, and work with a qualified CPA or tax attorney on any decision that carries real money.